Technology | Media | Telecommunications

Thursday, September 04, 2008

Mobile Use of Social Networks is Growing

Online social networking use is growing, but what happens when all those virtual friends hit the road? Increasingly, they will be able to stay in touch via mobile versions of their favorite social networks -- using their cellular phones.

ABI Research forecasts that in 2013 more than 140 million subscribers will share anytime, anywhere social network experiences this way, and they will generate subscription revenues in excess of $410 million.

"Subscriber numbers for mobile social networking will climb at a relatively modest rate for the next three or four years, but will then start to accelerate sharply," says research director Michael Wolf.

"That uptick is based on assumed acceptance levels in the giant emerging markets such as Brazil, Russia, India, and China. Those countries are wild-cards, very difficult to estimate, so we are quite conservative in our forecasts."

Some mobile versions of social networks will follow the same model common to today's Internet-based groups such as MySpace and Facebook -- free browser-based access. Such models pose a problem for mobile network operators by limiting their slice of the revenue to a charge for data traffic.

"The ideal scenario for the mobile operator includes a recurring revenue stream: a subscriber paying $1.99 or $2.99 a month to have this application on their handset," says Wolf.

Beyond the relatively modest subscription revenues that mobile social networking will generate, there will also be significant opportunities in mobile advertising as well as in mobile content sales.

A recent end-user survey conducted by ABI Research showed that mobile users of social networks are likely to consume two or three times as much digital mobile content -- pictures, music, videos and games -- than their asocial peers.

That would suggest a golden marketing and advertising opportunity yet, says Wolf, that isn't happening. "They are not offering the right kinds of products for these users. The advertising isn't that sophisticated yet."

His conclusion is that social networking applications have to be uniquely mobile and not reliant entirely on advertising-based revenues, at least not initially.